For 50 years AÏDA has been at the forefront of Real Estate services in South Africa. Named after its founder Aïda Geffen, AÏDA has been delivering quality products and services to members and consumers alike since 1958. When home buyers and sellers think real estate, they think of the AÏDA brand, a Real Estate Group most likely to service their home ownership needs.

Sunday, 25 November 2012

The world-wide expectation is that a scarcity of capital will prevail in
2013, resulting in no increase in mortgage lending.

So says Neville McIntyre, chairman of Aida's parent company Jigsaw Holdings, says. "The demand for housing, on the other hand, is set to increase
dramatically, so we foresee a slight increase in the number of property
transactions and in the number of new developments coming to the market. There
will also, of course, be strong demand for rental properties, which will be
good for buy-to-let investors and prompt an increase in investment
purchases."

He says large numbers of "distressed" properties being brought
to market by the banks and sold below market value will suppress home prices in
2013. These "bargain" properties will sustain activity and awareness
and make home ownership more accessible for quite a number of people.

McIntyre also says that a lack of skills and capacity in government and
planning departments, as well as in some deeds office branches remains of
serious concern to the property industry. It causes major delays in
developments, zoning approvals and transfers, and that has financial
implications for everyone in the property sale chain.

Rudi Botha, chief executive of mortgage originator
BetterBond, doesn't expect any rise in the prime interest rate until at least
the end of 2013.

But many prospective homebuyers will remain unable to take advantage of
low interest rates that make home ownership more affordable, so there is also
unlikely to be any significant rise in home sales or prices next year, he says.

"The problem is that many households still have just too much debt
to qualify for home loans, and the situation has being exacerbated this year by
huge growth in unsecured lending, particularly by loan sharks who take
advantage of consumers and charge exorbitant interest rates that just sink
people deeper into debt."

He believes the banks, while retaining their strict credit criteria,
will be focusing more on secured lending next year rather than personal loans
and other forms of unsecured lending, and this will encourage consumers to pay
down their debts and save the deposits they need to get home loans at
advantageous interest rates.

And that should bring about an improvement in home loan grant rates and
home purchases towards the end of 2013.

Botha says first-time purchases, which account
for 40 percent of the total, will continue to be the main drivers of the market
next year, as they free up existing owners or developers to make further
purchases or start new projects.

"We do, however, expect buyers at all levels to respond to
ever-rising food, fuel and utility costs, and higher property taxes, by
continuing to 'buy down' to smaller and less expensive properties, and this
will also constrain house price growth, especially in the upper sectors of the
market."Berry Everitt, managing director of the Chas Everitt International
property group, says 2013 will be the year when property developers start
making a moderate re-entry into the market.

"There has of course been some development at the lower end of the
market for the past few years, because buyers in this sector are often
subsidised or able to gain special access to 100 percent home loans. However, I
expect developers will become increasingly active in the R650 000 to R850 000
price bracket where the banks are lending well, especially on newly-built
homes."

He believes banks will continue, for most of next year, to keep a lid on
the market by valuing properties and lending according to bank security value,
which doesn't necessarily coincide with market value.

"In other words, they will often not be prepared to lend as much as
the prospective buyer is willing to pay, leaving serious sellers little choice
but to lower their prices if they want to conclude sales."

An alternative response is for buyers to increase their deposits, but
this seldom happens, and it is more likely that buyers will abandon deals if
sellers won't budge, and look for cheaper properties.

"So either way, this practice is likely to prevent the rising
housing demand that we see occurring next year from being translated into
rising property prices, as it usually would be. In fact, we don't expect
nominal house price growth to top inflation next year."

He says major brands will add to their franchise offerings new systems
and processes for managing long-term and holiday rental properties, to
"recession proof" their franchisees.Lew Geffen, chairman of Sotheby's International Realty in SA, says he
expects a much more buoyant residential property market in 2013.

"The recession is over, not only economically but also
psychologically, and consumers are now much more confident about moving on with
their lives and advancing their home ownership plans. Housing demand is
increasing at all levels, and although bank caution is slowing sales in the
under R1.5m category, this is much less of a problem in the higher price
sectors, where buyers generally require finance for a smaller percentage of the
purchase price."

Sotheby's has experienced a sales surge in the R6m to R10m range, driven
mainly by South African buyers taking the opportunity to upgrade to larger and
more luxurious properties at the current favourable prices - in the belief that
these won't hold for more than another year.

Geffen expects overall price growth in 2013 to be constrained at around
the level of inflation until more stock is absorbed, but is confident prices
will start to climb strongly in 2014, which he believes will be the start of a
new boom.

Jan Davel, managing director of the RealNet estate agency group, says
household finances are likely to remain under severe pressure in 2013, which
will limit the ability of prospective buyers to qualify for bonds and become
home owners.

"On the one hand, the increased consumer demand for credit in 2012
has been matched by aggressive lending for personal loans, and many households
will be carrying increased debt loads into 2013.

"Then on the other hand, real disposable incomes are likely to
shrink due to such factors as Eskom tariff hikes, rising food and fuel prices,
higher municipal rates and the introduction of e-tolling in Gauteng. So debt ratios that have been declining
will, in many cases, go back up again and choke off demand. Many households
will simply not be able to qualify for home loans, despite the fact that
interest rates are expected to stay low in 2013.

"And those same low interest rates will make it difficult even for
those without much debt to grow their savings and pay the substantial deposits
that banks so often require now to grant loans."

Meanwhile, says Davel, there is an abundance of distressed properties
being sold by the banks at much-reduced prices - about 80 percent of current
market value, on average - and this will have an additional negative effect on
house price growth.

"Consequently, we expect relatively low nominal house price growth
during 2013, and negative real house price growth, similar to that in
2012."

He says the property industry will be going through a "detox"
next year, as current estate agents have until the end of 2013 to bring their
minimum qualifications up to date, and Continuous Professional Development has
also been brought into play.

"These barriers to entry, together with legislation like the
Consumer Protection Act, rising consumerism, ever improving technology and a
much more efficient Estate Agency Affairs Board will all have an extremely
positive influence on the industry, since agents who don't pay attention to the
new training requirements, skills intensities, rules, procedures and market
conditions will be unable to keep up with those who have geared up for a more
professional arena. The industry will say goodbye to many of the ' not- so-
good' operators," says Davel.

Neville McIntyre, chairman of Aida’s parent company Jigsaw Holdings, says the expectation all over the
world, and not just in SA, is that a scarcity of capital will prevail in 2013
and that there will thus be no increase in mortgage lending.

“The demand for housing, on the other hand, is set to increase dramatically,
and because of that we foresee that there will be a slight increase in the
number of property transactions and in the number of new developments coming to
the market.

“There will also, of course, be strong demand for rental properties,
which will be good for buy-to-let investors and prompt an increase in
investment purchases.”

He says large numbers of “distressed” properties still being brought to
market by the banks and sold at below market value will suppress home prices in
2013 – “but at the same time these ‘bargain’ properties will sustain activity
and awareness and make homeownership more accessible for quite a number of
people”.

McIntyre also notes that a lack of skills and capacity in government and
planning departments and well as in some Deeds Office branches remains of
serious concern to the real estate industry.

“It causes major delays in developments, zoning approvals and transfers,
and that has financial implications for everyone in the property sale chain.”

GERMISTON HOMES FIND FAVOUR

Demand for homes in Germiston has
escalated rapidly in the past three months and stock is being taken up fast
with homes that were regarded as overpriced a few months ago now finding ready
buyers.

Madelein Muller, manager at the local
Aida estate office, reports that the market was subdued until the end of winter
with plenty of stock available. "But after the July cut in interest rates,
excess stock was taken up quickly, even at asking prices that a few short months
ago were regarded by buyers as too high.

"And at the current levels of
demand, we expect that prices may actually start to rise in a month or two as
stock becomes scarcer," she says.

Entry-level homes are in particular
demand and units priced from R650 000 to R750 000 are selling fast in areas
such as the city centre, Primrose and Birdview. Buyers are mainly upwardly
mobile consumers from surrounding areas such as Katlehong, Vosloorus,
Jeppestown and Malvern, who see good value in units with three bedrooms, two
bathrooms and a garage in this price range.

Homes in the mid-market range are
currently also selling well at around R850 000. Properties at this price
typically offer up to four bedrooms, two bathrooms, family rooms and a pool and
are popular among buyers with families.

Larger homes in areas such as Dawn View,
Fisher’s Hill and Primrose Hill have also overcome price resistance among the
new buyers streaming to Germiston. Priced at R900 000 to R1,1m, homes in these
areas often feature good views, and many have separate cottages, granny flats
or staff quarters. Most homes have tile roofs, creating an attractive profile
on the hillsides.

"Compared to median prices for this
class of property elsewhere, Germiston offers excellent value - a fact not
missed by new middle-class buyers looking to settle their families in spacious
homes in established suburbs," says Muller.

Sunday, 18 November 2012

Neville McIntyre, chairman of Aida’s
parent company Jigsaw Holdings, says the expectation all over the world, and
not just in SA, is that a scarcity of capital will prevail in 2013 and that
there will thus be no increase in mortgage lending.

“The demand for housing, on the other
hand, is set to increase dramatically, and because of that we foresee that
there will be a slight increase in the number of property transactions and in
the number of new developments coming to the market.

“There will also, of course, be strong
demand for rental properties, which will be good for buy-to-let investors and
prompt an increase in investment purchases.”

He says large numbers of “distressed”
properties still being brought to market by the banks and sold at below market
value will suppress home prices in 2013 – “but at the same time these ‘bargain’
properties will sustain activity and awareness and make homeownership more
accessible for quite a number of people”.

McIntyre also notes that a lack of
skills and capacity in government and planning departments and well as in some
Deeds Office branches remains of serious concern to the real estate industry.

“It causes major delays in
developments, zoning approvals and transfers, and that has financial
implications for everyone in the property sale chain.”